Pelosi: New health care bill is 'historic moment'

By ERICA WERNER, Associated Press

WASHINGTON - After months of struggle, House Democrats rolled out sweeping legislation Thursday to extend health care coverage to millions who lack it and create a new option of government-run insurance. A vote is likely next week on the plan largely tailored to President Barack Obama's liking.

Speaking on the steps of the Capitol, House Speaker Nancy Pelosi said Congress was at a "historic moment" and lawmakers were "on the cusp of delivering on the promise of making affordable, quality health insurance available to every American."

Officials said the measure, once fully phased-in over several years, would extend coverage to 96 percent of Americans. Its principal mechanism for the wider coverage is creation of a new government-regulated insurance "exchange" through which private companies would sell policies in competition with the government. Federal subsidies would be available to millions of lower-income individuals and families to help them afford the policies, and to small businesses as an incentive to offer coverage to their workers.

Large firms would be required to cover their workers, and most individuals would be required to carry insurance.

Thursday's ceremony marked a pivotal moment in the Democrats' yearlong attempt to answer Obama's call for legislation to remake the nation's health care system by extending insurance, ending industry practices such as denying coverage on the basis of pre-existing medical conditions and slowing the growth of medical spending nationwide.

Across the Capitol, Senate Democrats, too, are hoping to pass legislation by year's end. Legislation outlined by Majority Leader Harry Reid this week would include an option for a government-run plan, although states could drop out if they wished, a provision not in the House measure.

Obama said House Democrats had reached a "critical milestone" on the road toward health care overhaul, and he singled out the proposed government insurance option. He also said the bill "clearly meets two of the fundamental criteria I have set out: It is fully paid for and will reduce the deficit in the long term."

Republican reaction was swift and critical.

Rep. Tom Price, R-Ga., head of the Republican Study Committee, said Democrats had produced a "government takeover that will limit choice, competition and innovation in health care while increasing costs and decreasing quality." He said the measure would kill jobs, raise taxes and inflict cuts on a program of private Medicare that provides benefits to millions of seniors.

The insurance industry criticized the bill, with America's Health Insurance Plans arguing that it would increase costs and disrupt "the quality coverage on which millions of Americans rely today." But the Federation of American Hospitals welcomed the bill as "an important milestone on the road to reform."

In Congress, GOP leaders long ago decided to oppose the approach requested by Obama and taken by Democrats, and health care is expected to figure in next year's congressional election campaigns.

Democrats issued a statement saying their 1,990-page measure "lowers costs for every patient" and would not add to federal deficits. They put the cost of coverage at under $900 billion over 10 years, a total that leaves out several items designed to improve benefits for Medicare and Medicaid recipients and providers, as well as public health programs and more.

The legislation would be financed by a combination of cuts in planned Medicare spending and an income tax surcharge of 5.4 percent on individuals making at least $500,000 annually and couples making at least $1 million.

With Republicans expected to oppose the measure unanimously, Pelosi and her lieutenants worked for weeks to resolve differences within the Democratic rank and file.

The toughest dispute involved the terms under which the government insurance option would function. Liberals generally wanted the government to dictate the rates to be paid to doctors, hospitals and other health care providers, with the fee levels linked to Medicare.

Moderates, fearing the impact on their local hospitals, held out for negotiated rates between the government and private insurers - and won.

Not all liberals were ready to sign on. "My inclination is not to support it," said Rep. Raul Grijalva, D-Ariz., a co-chair of the Congressional Progressive Caucus, but that represented a softening of his opposition.

Grijalva acknowledged there was an argument for progressives to vote "yes." "The logic is to keep the ball rolling," Grijalva said Thursday.

Democrats control 256 seats in the House, are overwhelmingly favored to win one special election next week and are competitive for another. As a result, they can afford more than 30 defections on the legislation and still prevail.

House Democrats' campaign arm wasted no time in using the bill release as a fundraising opportunity. The Democratic Congressional Campaign Committee e-mailed supporters asking them to help raise $50,000 by Thursday night "so we have the resources to fight back against Republican attacks and prove that grass-roots Democrats are standing strong behind health insurance reform with a strong public option."

The bill would require nearly everyone by 2013 to sign up for health coverage either through their employer, a government program or the new exchange.

In the meantime, a temporary government program would help people turned down by private insurers because of medical problems, lawmakers said. After that, insurers no longer could refuse to provide coverage to the sick, nor could they charge more because of poor health of the insured.

The plan also calls for a significant expansion of Medicaid, the federal-state health program for low-income people. And it would impose a requirement on employers to offer insurance to their workers or face penalties.

Pelosi, D-Calif., and the leadership have yet to work out disputes over abortion services and health care for immigrants, issues that must be settled before the bill can come to a vote.

Pelosi has also said the bill would strip the health insurance industry of a long-standing exemption from antitrust laws covering market allocation, price fixing and bid rigging. The bill also would give the Federal Trade Commission authority to look into the health insurance industry at its own initiative.

While precise figures were not immediately available, it appeared the legislation would target the drug industry for more than the $80 billion that pharmaceutical firms agreed to contribute toward health care in a deal earlier this year with the White House and key senators. But the industry managed to come away with a provision worth billions: 12 years of market protection for high-tech drugs to combat cancer, Parkinson's and other deadly diseases.

Medical device makers also took a hit, with a 2.5 percent excise tax on sales of their products that is reported to cost the industry $20 billion over the next decade. A $40 billion fee on those businesses was included in a Senate Finance Committee-approved version of the legislation, but Reid is considering cutting it by as much as half.